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Free Radicals

An IPSE-commissioned report by leading think tank Demos, confirming the extraordinary rise of self-employment since 2001 and arguing for a new deal to accommodate it. 

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Executive Summary

The steady rise of self-employment since the turn of the millennium is arguably the most significant labour market trend of the past two decades. There are now some 4.77m self-employed workers plying their trade in the British labour market – nearly 15 per cent of the total workforce, up from around 12 per cent in 2001. Moreover, given self-employment’s resilience in a variety of economic circumstances – before, during and after the Financial Crisis - there is little doubt now that its rise represents a structural rather than cyclical transformation. As such, the public policy debate about self-employment should no longer be confined to the margins: it is a mainstream employment arrangement and deserves a level of political attention that befit its status. 

This report aims to assist that process. More importantly, it seeks to respond to a matter of public policy urgency. Because the truth is that policy has not reacted adequately to self-employment’s extraordinary rise. Indeed, the dominant ethos of the relevant public policy systems - employment legislation, tax and benefit, education and training – are still consistent with a time when self-employment was markedly less central to British society and its economy. In fact, at times this ethos can even seem as if it encourages a tacit ‘corporatist bias’ towards a labour market model that favours, implicitly or explicitly, employment by large firms. Remarkably, it is still not hard to find policymakers to discuss self-employment as an ‘irregular’ or even ‘abnormal’ employment arrangement. In an era where selfemployment approaches the size of the public sector, this instinct is no longer tenable - Britain’s self-employed millions urgently need a ‘new deal’. 

Across six key public policy themes – savings, the platform economy, tax, education, working conditions and support for vulnerable workers – this report makes thirty recommendations that aspire to suggest what that new deal might look like in practice. Furthermore, these recommendations are grounded in a research project that also explored three distinct questions: 

  1. Who are the self-employed? 
  2. What is the self-employed experience in Britain’s labour market? 
  3. How has the rise of self-employment changed Britain’s modern economy?

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